U.S. Supreme Court Says Software Patents Are Alive and Well
Submitted by: Douglas Kim on Jun 28, 2010 at 3:41 pm
Tagged with: software patents busines methods intelletual property capital company assets
Source: McNair Law Firm, P.A.
The United States Supreme Court decided Bilski v. Kappos on June 28, 2010 and the general results is that business methods and software are patentable subject matter. In 1998 the case State Street Bank & Trust Co. is largely credited with “opening the flood gates” to business method and software patents.
In 2008, the Federal Circuit, the court of appeals for patent cases, decided In re Bilski where it retreated from the State Street position which resulted in the Patent Office severally limiting the patentability of business methods and software. Specifically, the Federal Circuit stated that the only test for patentability for business methods (and software) would be the “machine-or-transformation test”. This test says that “[a] claimed process is surely patent-eligible under §101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”
Today, however, the United States Supreme Court stated that “nothing in today’s opinion should be read as endorsing interpretations of §101[patentably subject matter] that the Court of Appeals for the Federal Circuit has used in the past.” The Supreme Court said today that the “machine-or-transformation test is not the sole test for determining patentability,” effectively reopening the road to business method and software patents.
In the Bilski opinion, Justice Kennedy states that “Congress plainly contemplated that the patent laws would be given wide scope” in order to ensure that “ingenuity should receive a liberal encouragement”. After all, the patent laws are based upon the United States Constitution which states: “Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries “
It is notably that Mr. Bilski himself did not ultimately receive a patent since his “invention” was deemed to be nothing more than the concept of “hedging” in the financial market and was deemed to be an unpatentable abstract idea. The Supreme Court held that allowing such a patent would preempt use of this approach in all fields and would effectively grant a monopoly over an abstract idea; something that is not allowed.
From Bilski, we learn that business method and software patents are
Doug Kim chairs the Intellectual Property Practice Group, where he concentrates on counseling companies concerning the protection and enforcement of intellectual property rights as well as assisting in enhancing intellectual property portfolios to increase company worth. He advises clients as to the creation, management and protection of intellectual property and assets and assists in the development of an intellectual property protection plan to create intellectual property portfolios. Doug combines his experience in patents, trademarks, service marks, copyrights and trade secrets to assist clients in a comprehensive and integrated intellectual property protection program to build intellectual capital for his clients.
dkim@mcnair.net - www.mcnair.net/dkim - 864-552-9370